Brabners and VAT on search fees

This link is lurking within various websites but clarifies that HMRC remain committed to their view that VAT is due on search fees unless the searches are simply passed on without comment or analysis (which in substance isn't likely to be the case for most).

Whilst the case isn't yet binding, HMRC could therefore ask you about four years' worth of unpaid VAT on these and obviously will be keen to understand you are accounting for VAT on these now.

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HMRC has confirmed that they do not intend to change the approach set out in their published guidance as to whether a property search fee should be treated as a disbursement for VAT purposes. If the search is passed on to the client without comment or analysis, HMRC says the fee may be treated as a disbursement. However, if the firm uses the search itself, for example in providing advice, or a report, HMRC’s view is that the fee will form part of the charges for its services and will be subject to VAT